Sri Lanka’s Colombo tea auction goes online amid Coronavirus curfew

ECON0MYNEXT – Sri Lanka’s Colombo Tea Traders Association and Ceylon Chamber of Commerce which had conducted a physical auction for over a century said the sale had gone online from April 04 to April 07 as the country remained under tea curfew to curb the spread of Coronavirus.

“This is a historic event, as it is the first time in 126 years that the tea auction deviated from it conventional ‘out-cry’ system, requiring the physical presence of the buyers, to move into the electronic age with buyers recording their bids from remote locations,” the CTTA said.

stakeholders of the industry, at such short notice, and extend our felicitation to all the members of the tea industry for their contribution, through their support and cooperation, to this ground-breaking initiative

The CTTA which is linked to the Ceylon Chamber of Commerce, has its origins in 1894.

After Sri Lanka expropriated private plantations, Sri Lanka Tea Board, a state agency was set up in 1975 as a regulator, and the tea auction came under it. However the CTTA and Ceylon Chamber of Commerce continued to manage it.

The physical auction up to March 18, had been conducted in the premises of the CCC. (Colombo/Apr06/2020

Sri Lanka’s online tea auction sees computers trailing human sellers – so far

ECONOMYNEXT – Sri Lanka’s Colombo tea auction, which went online due to a Coronavirus curfew ending a 126-year-old tradition is doing the job, but the digital sales process is still slower than human outcry system it replaced as market participant learn the ropes, brokers said

An auction due to take place on March 24 had to be abandoned as curfews were slapped on the district which had been defined as high-risk areas for COVID-19.

For 126 years, Colombo’s tea brokers have met on an auction floor to sell tea. Up until March auctions were conducted on the premises of the Ceylon Chamber of Commerce which has an amphitheater-like hall for the task.

We started the (digital) auction on Saturday (April 4th, 2020), and it is going on without any hiccups,” said Zameel Mohammed from Ceylon Tea Brokers, who is also the Tea Convenor of the Ceylon Tea Traders Association.

The digital system was developed in record time and is doing its job well, except for one thing.

“This platform took a while to design and once it was designed, we got it going,” said Yshan Fernando, Managing Director of Forbes and Walkers.

“But in this system, we couldn’t sell as fast as we normally do in the manual system, maybe because people are not used to it yet.”

Though the computers will eventually win, at least for the moment they cannot compete with human tea sellers.

Experienced sellers at Colombo auctions going at full steam in Colombo can sell a lot of tea totaling millions of kilograms a day, which may give an inkling as to why there was resistance to the auctions going digital earlier.

Former Minister Harsha de Silva in a Facebook.com post said when a start-up company he was involved in developing a digital platform to the CTTA, 18 years ago to automate the auctions, there was resistance and it had to be abandoned.

The first auction had been held in 1883 at Sommerville and Company, he said. The company is still around.

“But… as is the case most of the time… innovation is blocked,” de Silva said. “Those who are used to tradition find it so hard change. With multiple blocks by many who just didn’t want to change, created issues for all of us, and the project fell through.”

De Silva then set up a system at the Dambulla vegetable market. This week the Dambulla market also closed indefinitely.

Anyone who has watched a tea auction live can well appreciate that the outcry system did the job, quite quickly reminding people of the adage, ‘If it ain’t broke, don’t fix it’.

However many in the tea trade had been pushing for automation since there were 12,000 different lots of multiple grades coming up for auction on multiple days, which was making it difficult for buyers to taste and be ready for auction.

Before the auction brokers send samples to buyers in Colombo as well as abroad, which some industry officials say is one reason for Sri Lanka tea to fetch relatively high prices. (Colombo/Apr07/2020-sb)